Alliance Data says Blackstone anticipates it won't close deal

Published 6:00 pm, Sunday, January 27, 2008

Alliance Data Systems Corp. said Monday that private equity firm Blackstone Group LP doesn't expect to complete a planned $6.4 billion acquisition of the credit card services provider because it feels regulators want to place onerous terms on the takeover.

According to Alliance, Blackstone told it after the market closed on Friday that the Office of the Comptroller of the Currency was seeking to put conditions on the deal that "represent operational and financial burdens" on Alliance and Blackstone and its affiliates "that cannot be reasonably assumed.

Blackstone said in May that it would purchase Alliance Data for $81.75 per share in cash. Alliance Data shares fell in recent weeks amid rumors that Blackstone was seeking to renegotiate the terms or scrap the deal altogether. Alliance Data had denied the speculation.

Blackstone also believes alternative solutions that it would find acceptable would not satisfy the regulator, so further negotiations with the OCC would be futile, Alliance said.

Alliance Data said it doesn't believe the OCC's proposal to Blackstone represents the agency's final position on the acquisition, and believes Blackstone is able to satisfy the conditions to closing the acquisition.

Alliance Data said its board and special committee are considering all possible actions.

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A Blackstone spokesman said the company did not have comment at the moment but indicated it would release a statement during the day.